Inefficient Intra-Firm Incentives Can Stabilize Cartels in Cournot Oligopolies.

Arbeitspapier

The need for intra-firm incentive schemes allows remodeling the Cournot duopoly in wages (rather than in output levels). In both versions of the Cournot model, a cartel agreement is unstable. The new formulation, however, allows us to demonstrate that a collective wage agreement on minimum wages can stabilize the cartel solution. Beyond its relevance for strategic management, this result has a policy implication: competition authorities should observe collective wage agreements for their potential collusive effect on product markets. Moreover, the model may provide a new explanation why firms in reality pay lower than efficient variable wages and higher fixed wages than predicted by contract theory.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CSLE Discussion Paper ; No. 2004-09

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Noncooperative Games ; Labor-Management Relations, Trade Unions, and Collective Bargaining: General ; Monopolization; Horizontal Anticompetitive Practices ; Compensation Packages; Payment Methods ; Labor Law ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Bargaining Theory; Matching Theory
• Thema: Principal-agent theory ; piece rate ; fixed wage ; collective wage agreements ; Nash bargaining solution

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kirstein, Roland ; Kirstein, Annette
• Ereignis: Veröffentlichung
• (wer): Universität des Saarlandes, Center for the Study of Law and Economics (CSLE)
• (wo): Saarbrücken
• (wann): 2004

Weitere Informationen

• Handle: http://hdl.handle.net/10419/23069
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ